How Investment Funds Can Drive the Green Transition

2021-10-12T14:40:12-04:00October 4, 2021|

By Fabio Natalucci, Felix Suntheim, and Jérôme Vandenbussche

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Sustainable investment funds need to be scaled up to support a successful transition to a green economy.

The transition to net-zero greenhouse gas emissions requires unprecedented change by companies and governments, as well as additional investment of as much as $20 trillion over the next two decades. Strong fiscal policies, complemented by a broad range of regulatory and financial policies, will be necessary to facilitate the green transition.

The world’s $50 trillion investment fund industry, especially funds with a sustainability focus, can play an important role financing the transition to a greener economy and helping to avoid some of the most perilous effects of climate change, according to our recent analysis as part of the IMF’s Global Financial Stability Report.

Net flows into sustainable funds increased notably in 2020.

Sustainable funds differ from conventional funds because they have a sustainability objective while also seeking financial returns. Within this broad class of funds, some funds are more narrowly focused on the environment, and a further subcategory is concerned with climate change mitigation specifically.

Climate stewardship and firm financing

The positive role of funds comes […]

The Climate Issue

2021-09-07T10:37:49-04:00September 7, 2021|

By Gita Bhatt

In Ernest Hemingway’s novel The Sun Also Rises, a character is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.”

It’s the same with climate change. The damage is becoming less and less gradual, and unless we take action, the world could suddenly reach an irreversible tipping point.

We now know the problem is much worse than we once thought. It requires not incremental change, but radical overhaul—roughly halving carbon emissions each decade through 2050. Getting there demands that we rapidly shift to renewables, build new electricity networks, increase energy efficiency, and embrace low-carbon transport. Cheaper renewable energy and technology advances make the move from carbon affordable and feasible.

This special issue on climate, in partnership with the UN Climate Change Conference (COP26), brings together a diverse range of voices from academics, policymakers, the private sector, and youth activists. It focuses on the urgent need for climate action and for different, mutually supportive climate policies.

Contributors, including Amar Bhattacharya and Nicholas Stern, identify concrete solutions that can generate massive opportunities for jobs and growth, driven by stepped-up infrastructure investment and technological innovation and supported by a dynamic private sector. The IMF’s Kristalina Georgieva recommends credible carbon pricing policies to encourage the use of green energy, while Harvard’s […]

Reaching Net Zero Emissions

2021-07-28T17:35:14-04:00July 22, 2021|

By Florence Jaumotte and Gregor Schwerhoff

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Climate action is gaining momentum. Since the 2015 Paris Agreement, countries have intensified climate action and many have committed to reach net zero emissions by 2050, meaning that any additional carbon emissions will be offset completely by carbon emissions withdrawn from the atmosphere. […]

A New Vision for the US Climate Agenda

2021-07-27T13:05:44-04:00March 10, 2021|

By Ian Parry

عربي中文, Español, Français日本語, Português, Русский 

Over the next decade, global greenhouse gas emissions need to be cut by 25– 50 percent to be on track for meeting the 2015 Paris Agreement goal of containing global warming to 1.5–2°C.The United States intends to do its part. Its climate plan pledges US carbon neutrality by 2050, with a 2030 emissions target to be announced shortly.

[…]

Why Climate Change Vulnerability Is Bad for Sovereign Credit Ratings

2021-02-18T14:07:57-05:00February 17, 2021|

By Serhan Cevik and João Tovar Jalles

عربي中文, Español, Français, 日本語, Português, Русский 

Climate change has made the world a riskier place.

The destruction wrought by heatwaves, droughts, hurricanes, and coastal flooding doesn’t stop with the toll on human lives and livelihoods—it can also have deep consequences for a country’s finances. […]

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